What will be the effects on the balance sheet

Assignment Help Financial Accounting
Reference no: EM131157090

Three Questions

You are the owner of a successful small business. You have just finished a year of large capital investments using borrowed funds. Your banker requires quarterly financial statements to monitor the financial health of your company. The banker has warned you that if profit margins decline she may have to increase interest rates on the loans you have with the bank to reflect increased loan risk from the banker's perspective. You fear profit margins have declined and decide to add all repairs and maintenance expenditures to the value of the assets on the Balance Sheet. You also decide to switch to straight line depreciation for all of your medium term assets instead of the declining balance method you have been using.

• Are your changes in depreciation accounting ethical or legitimate depreciation assumptions?

• What will be the effects on the Balance Sheet, Income Statement, and profit margins of your actions?

• How does a switch from declining balance to straight line depreciation affect the depreciation amount and the income statement?

Reference no: EM131157090

Questions Cloud

Promotional manager of a new line of cosmetics : Issue: As the promotional manager of a new line of cosmetics targeted to preteen girls, you have been assigned the task of deciding which promotional mix elements - advertising, public relations, sales promotion, personal selling, and social medi..
Supply chain risks and associated risk-reduction tactics : Correctly lists the major categories of supply chain risks and associated risk-reduction tactics and explains how the company could avoid exposure to supply chain disruptions (nissan case study)
Estimate the composition of the liquid : Use Raoult's law to estimate the composition of the liquid and the system temperature.
Explain desirable characteristics that reduce transaction : What factors affect a firm's degree of transaction exposure in a particular currency? For each factor, explain the desirable characteristics that would reduce transaction exposure
What will be the effects on the balance sheet : What will be the effects on the Balance Sheet, Income Statement, and profit margins of your actions? How does a switch from declining balance to straight line depreciation affect the depreciation amount and the income statement?
Determine the single premium for a policy : Determine the single premium for a policy that will be issued to a 50 year-old male, given the following mortality statistics for males ages 50-59:
Do you think employees would favor a specific plan : Some employers combine all paid time off, such as vacation, sick leave, holidays, and personal days, into one large bank of time, typically called paid time off (PTO). Discuss your organization's current paid leave program. Does your organization ..
Explain what the confidence interval means in that context : Find a confidence interval in the news or a news release and explain what the confidence interval means in that context. Does the article appear to be constructing and using the confidence interval correctly?
What are disadvantages of conducting drug trial in nigera : What are your primary concerns about conducting the drug trial in Nigeria? What are disadvantages of conducting the drug trial in Nigera? What are advantages of conducting the drug trial in Nigera

Reviews

Write a Review

Financial Accounting Questions & Answers

  Standard deviation data alone

Using standard deviation data alone, which security is considered more risky Using coefficient of variation as your sole analysis, which is the best choice of Security.

  Comparative balance sheet of rodenbeck company

Using the data from the comparative balance sheet of Rodenbeck Company, illustrate vertical analysis.

  Purchased equipment for 12000 in exchange for a note

use the following information to prepare a statement of cash flows for hanson inc. for the year ended december 31 2009

  How would journal entities look at acquisition of funds

You are believer that new employees should practice their accounting skills before "throwing them into the fire." Therefore, you have listed a series of transactions that require journal entries and updating of T-Accounts.

  Prepare the sales and production budget

A manufacturing Co. submits the following figures for the first quarter of 1980: You are required to prepare the Sales and Production budget for the 1st Quarter of 1981.

  At december 31 2007 western trading co owned the following

at december 31 2007 western trading co. owned the following investments in the capital stock of publicly owned

  Compute the ending inventory and cost of goods sold

Shown below is activity for one of the products of Denver Office Equipment: Compute the ending inventory and cost of goods sold assuming Denver uses FIFO. Compute the ending inventory and cost of goods sold assuming Denver uses LIFO and a perpetual i..

  Question snapper ltd starts a business that makes womens

question snapper ltd starts a business that makes womens shoes. it performs a factory in an inner suburb of perth. the

  Organize the information in accounts under an accounting

Organize the information in accounts under an accounting equation. What amount of net cash flow from operating activities would be reported on the 2012 cash flow statement?

  Compliance with the conceptual framework

Are the annual reports in compliance with the conceptual framework and AASB standard requirements and you need to use extracts from the annual reports to support your analysis.

  Prepare the journal entries to record the transactions

Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $160,000 to Furtastic on June 30, 2016. Record the Furtastic’s purchase of advertising service..

  Capital expansion project-weighted average cost of capital

Husky Inc. is considering a capital expansion project. The initial investment of undertaking this project is $214,500. This expansion project will last for five years. Husky has a capital structure consisting of 60% debt and 40% equity. The after-tax..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd